Legal challenge to new cheese regulations
Cheese makers including Kraft Canada have taken legal action against changes to regulations for the way cheese is made, which is expected to increase the cost processers pay for cheese ingredients by more than $70m.
Kraft along with Parmalat Canada and Saputo jointly filed an application in the Federal Court of Canada challenging the regulations which they claim will require cheese makers to strictly limit the use of modified milk ingredients. This is likely to result in the use of more raw milk, which would increase costs.
Yvan Loubier, a spokesman for the three cheese makers, said: “The clear intent of these new regulations is additional revenue for dairy farmers. Unfortunately any gains for dairy farmers will likely be short-lived.
“The new regulations will hurt both cheese makers and dairy farmers. They will increase the price of cheese to consumers, may reduce cheese consumption and threaten the viability of Canada as a cheese making nation.
“Canada's dairy processors are the unique market for the milk produced by Canadian dairy farmers; the less cheese that is eaten by Canadian consumers, the less milk that will be needed from Canadian dairy farmers.”
The Dairy Processors Association of Canada (DPAC) had previously said that the move would force dairy processors to purchase more raw full fat milk to produce cheese by limiting the use of certain ingredients made from milk. These ingredients include whey protein, skim milk powder, milk protein and whey protein concentrates.
They anticipate that the purchase of additional raw milk will increase production costs.
The Canadian Food Inspection Agency’s cost-benefit analysis showed that cheese producers would see their revenues increase by $187m as a result of the regulations, whereas processors would face a cost increase for cheese ingredients of approximately $72m.
The changes to the Food and Drugs Act and the Canadian Agricultural Products Act will come into effect in December.
A government paper offering an overview of the situation, said that in Canada compositional standards for cheese are currently subject to two federal regulations. However these appear contradictory and industry has disagreed on how they should be interpreted.
Dairy processors favor a definition which allows virtually all milk solids to be used in the production of cheese, while dairy producers look to a far more restrictive list of ingredients permitted in the manufacture of cheese.
The regulation changes aim to identify and formalize the “historic levels” of dairy ingredients (in the form of milk proteins) that can be used by cheese processors and ensure uniformity and harmonization through the adoption of minimum standards governing the use of fresh milk in cheese-making.
It sets a minimum level of milk to be used to produce various cheeses, while allowing for other milk products, such as skim milk powder, whey and milk protein concentrates.
However Loubier added that the Canadian Food Inspection Agency has recognized that it is impossible to determine if the finished cheese that consumers buy complies with the new regulations.